Travel Trade Online March 20, 2009 By: Travel Trade Staff 20,000 visitors / month Hosts Upbeat on Biz, HB Growth Fri Mar 20 2009, by Travel Trade Staff In the following Roundtable discussion, some of the industry’s leading Host agencies talk about trends in the Host/Home Based segment of the industry, including: a growing number of Home Based agents, both with retail travel experience and new entrants; a thumbs up for their relations with suppliers; a very positive outlook about the future of the travel industry and surprising optimism about the business this year, even in the current downturn. As Cruise Planners’ Vicky Garcia said, “Those of us who have been ‘out there’ are going to BOOM” when the economy turns around, as she believes it will later this year. Given the Joystar bankruptcy and the never ending roster of card mill/MLMs, the Host agents discuss how Home Based agents should go about vetting Host agencies before deciding on an affiliation. In the following Part 1 of the Roundtable, Host agents discuss the growth in Home Based agents and how they work with suppliers. In Part 2, they talk about current business, their outlook going forward and how to select a Host. Is the Home Based sector growing, and if so how? Brad Anderson, co-president, America’s Vacation Center: America’s Vacation Center is having a record year and we are rapidly growing. The industry is becoming more and more globalized, and agencies that specialize are succeeding in today’s market. Based on our experience, the Home Based sector is continuing to grow, and the majority of travel professionals joining America’s Vacation Center are either already Home Based and seeking to boost their businesses, or they are moving to a Home Based model from storefront agencies or call center settings. Travel Trade Online March 20, 2009 By: Travel Trade Staff 20,000 visitors / month Michael Drever, CEO and founder, Expedia CruiseShipCenters: The Home Based sector is definitely continuing to grow. We continue to see a high level of interest from both experienced agents and newcomers to the industry. Experienced agents seem to be looking for a better “tool kit” that will provide them the opportunity to be more productive as sales people. The newcomers to the industry are either passionate cruise enthusiasts who would like to be a part of this great industry or people who have been recently displaced from a previous sales position generally. Or, merely people who are looking to generate a supplemental form of income and have fun doing it. Jackie Friedman, CTC, CTIE, general manager, Nexion Inc.: From my perspective, the Home Based agent sector continues to grow, even in a tough economy. Many of our agents come from brick and mortar agencies and are looking to move their business home to reduce operating expenses. Others are ready to give up their ARC number and are looking for air fulfillment so that they can operate from home. Some agents are attracted to the Home Based sector since it offers them an opportunity to shift from front-line agent to business owner without the capital outlay or operating expenses associated with owning a brick and mortar agency. In addition to the shift of experienced agents to the Home Based sector, we are finding that many new agents are entering the travel business from other industries, either intentionally or as a result of a layoff. Some start on a part-time basis as a second career with the hope of being able to transition into travel full-time. Others look at this as a great retirement career and there are many who take the plunge and commit to working in their Home Based agencies full-time. As I work with many of our new agents who attend our conferences and boot camps, some attributes emerge regardless of their previous business experience. Many new entrants have sales, marketing, service or technical backgrounds. They are well- networked, have a passion for travel and really like helping people. Regardless of where they came from, they bring experiences and passion with them that will help them to be successful in the travel industry. Ken Gagliano, president, Travel Planners International: TPI is seeing growth in both experienced and inexperienced agents. Smaller traditional storefront agencies are simply downsizing and going Home Based where they can realize the benefits of a Host relationship that helps them not only earn more commission, but also market themselves more effectively, assist with technology - booking tools and Web sites, along with differentiating themselves from the competition by finding a niche. Our recruiting numbers are way up, especially since the financial crisis started in August and the problems at Joystar. Since August, we have added well over 350 new agents and it’s only a matter of time before these agents get their sales ramped up. Travel Trade Online March 20, 2009 By: Travel Trade Staff 20,000 visitors / month Our main objective at TPI is to help our agents increase their sales through our marketing programs, create more efficiency in invoicing and tracking of commissions and, ultimately, help the agent earn more money. An agent and Host agency have to equally see value in the relationship and at TPI we focus on creating value with our programs. The agent sees the results in their checking accounts and less stress at the end of the day! If an agent could do it for less and earn more on their own, then why would they want to work with us? I often lose sleep on why more agents are not with a Host agency. Vicky Garcia, senior vice president, sales and marketing, Cruise Planners: We are seeing a significant growth of net new travel agents joining Cruise Planners/American Express over the same time last year. It’s amazing. Most are doing it for their passion for cruising. However, we are seeing more recently that it’s often coupled with the fear of the recession affecting their current jobs. It’s a great opportunity for our industry to grow and cruise lines to realize that the travel agent distribution channel is the best way for them to reach consumers. Let’s face it, Home Based agents are out in the local communities, shaking hands and kissing babies...this business is about relationships. It can’t all be done online. Betsy Geiser, director, sales and administration, Uniglobe Travel Center: The Home Based sector continues to grow and flourish. Agents are realizing that a storefront is not only cost prohibitive but also not necessary in the virtual world we live in. We have also seen a lot of interest from people looking for a post retirement career or people looking to change careers. Because the economy is dipping, many people have been laid off and have decided it’s time to do their own thing. Many of the people that I have been talking to have a passion for travel and are ready to start their dream career. Stephanie Lee, COO, TravelQuest: Absolutely. We’ve seen a wide variety of agents going Home Based due to office closures, downsizing and career changes. We signed up a record number of agents in January, despite the overall downturn in other areas of the travel industry, which tells me that people are seeing the value in going Home Based. You can’t beat the low overhead costs and flexibility that come with owning your own Home Based business. Travel Trade Online March 20, 2009 By: Travel Trade Staff 20,000 visitors / month Andi McClure-Mysza, president, MTravel.com: Yes, the segment is definitely growing and by various means: 1. Brick and mortars closing and just moving their businesses home; 2. Brick and mortars laying off experienced agents who are now starting up as Home Based agents to continue to take advantage of their skills; 3. New entrants, part-timers - people looking to start up a business prior to retiring (they want it to be established by retirement) OR people with honest travel sales potential brought in initially by the MLMs who have since learned the MLMs are not what they are looking for. Dwain Wall, senior vice president and general manager, CruiseOne and Cruises Inc.: The Home Based sector is growing rapidly, for several reasons. Most importantly - and those we most frequently hear from those joining our network - are flexibility and operational costs. Working from home provides travel agents with the chance to do what they love - selling travel - while having the flexibility to build their own schedules. Additionally, working from home keeps costs down, decreasing the overhead of maintaining a brick and mortar agency. Another reason we feel the Home Based category is exploding right now is the economy. Our recruitment numbers from industries other than travel continue to rise. This is exciting, because while we strive to grow our network through the addition of reputable, qualified agents with existing books of business, it is also important to bring fresh blood into the travel industry. As a result of layoffs in industries like banking and real estate, many people who may not have sold travel but are excellent salespeople are out there looking for a new opportunity. Many of those people also have an inherent entrepreneurial spirit and have always had a passion for traveling themselves. We continue seeing these types of new faces in our classes of CruiseOne Franchise Owners and Cruises Inc. Independent Agents. -------------------------------------------------------------------------------- Do suppliers deal effectively with Hosts? Drever: Our preferred supplier relationships have never been stronger and, yes, they work extremely effectively with Host agencies, provided you are a Host agency that is performing well or above average. It has always been our experience that it is not so much “what business model” you are operating in vs. whether you are performing well compared to the competitors in your sector of business and the industry overall. Generally, the difference between companies doing well and those not boils down to the level of investment each company or organization has made into their marketing, sales and operating systems over time. Travel Trade Online March 20, 2009 By: Travel Trade Staff 20,000 visitors / month Friedman: I guess my answer is both YES and NO. The suppliers who understand that Host agencies can help them effectively and efficiently reach and support large numbers of Home Based agents make great partners. They rely on us to help them reach out to our agents and their consumers and to help take on first level problem resolution to help them reduce their support costs. Just as not all Host agencies are the same, not all supplier support models are the same. Some have established dedicated sales teams that specialize in growing Home Based channel sales. Some have established secondary phone field models where independent agents are supported by local sales reps but still mapped to the Host. Some have figured out that Hosted agents do not fit neatly into geographic sales territories and have found ways to overcome that challenge. I view the relationships that we have with suppliers as a partnership where we work together to mutually grow our businesses. The truth is that there are still suppliers that do not truly understand the different Host models out there. They do not appreciate the role that we play in helping our independent agents evolve into successful sellers of travel for their brands. Probably the biggest challenge that we face is that there are still some suppliers who have internal compensation structures that are not aligned with the reality that many Hosted agents do not reside in the same geographic territory as the Host. Gagliano: For the most part, suppliers are finally realizing the benefits of closely working with Hosts. However, they still need a tremendous amount of education on what we can actually do and that’s where PATH (the Professional Association of Travel Hosts) can help. Again, it all comes down to value for the supplier and the cost of reaching out to Home Based agents in training and marketing. Garcia: For the most part they do. We happen to have great partnerships with all of the major cruise lines. Geiser: Many suppliers are working more closely with Hosts and many of our suppliers offer our agents their direct contact information so the agent has the ability to contact them if they need additional attention. I think that the suppliers are better recognizing Hosted agents as a significant part of their distribution stream. Lee: Overall, I would say yes. Although sometimes it can be challenging since our agencies don’t fit the mold of traditional agencies. We brainstorm with our reps and have found them very open to working on ways to tailor programs to our business model’s needs. McClure-Mysza: Interesting question. Many suppliers are getting better at dealing with Hosts as they better understand the needs and potential of the emerging Home Based agent market. There still are some issues that need addressing, one of the biggest being local BDM support for agents outside of the Host’s “territory.” Travel Trade Online March 20, 2009 By: Travel Trade Staff 20,000 visitors / month Wall: We have a very strong relationship with nearly every major cruise supplier and many land/tour operators. A large part of this is because we are not a small Host and represent such a significant amount of volume (as part of World Travel Holdings). Anderson: From America’s Vacation Center’s unique Host agency perspective, we have seen unwavering support from suppliers, and this would lead us to believe that in general, suppliers are dealing effectively with Host agencies. Royal Caribbean International and Celebrity Cruises’ ASAP program for instance is a great example of the suppliers’ efforts on behalf of professional sellers of travel. America’s Vacation Center is not a typical Host agency. Over 90% of our business comes from the Live Leads that we generate for our Independent Affiliates and America’s Vacation Center Independent Affiliates produce 10 to 20 times that of the average Home Based travel agent. For this reason, suppliers deal very effectively with America’s Vacation Center. For more see “Host Roundtable Part II: Hosts Tell How To Find Right Affiliation” www.traveltrade.com/6349.news.
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